CareTrust REIT, Inc. Announces $817 Million Recommended Cash Acquisition of Care REIT plc
CareTrust REIT (NYSE: CTRE) has announced an agreement to acquire Care REIT plc (LON: CRT) in a cash deal valued at US$817 million, including US$577 million in market capitalization and US$240 million in assumed net debt.
The acquisition offers a 32.8% premium to Care REIT's March 10, 2025 closing price. Care REIT's portfolio includes 137 care homes with approximately 7,500 operating beds across the UK, leased to 15 operators with a 20-year weighted average remaining lease term. The properties generate annual contractual rent of US$66 million, representing an initial yield of 8.1%, with a portfolio EBITDARM rent coverage of 2.2x.
The transaction, expected to close in Q2 2025, will be executed through a scheme of arrangement and has received unanimous approval from both companies' boards. CareTrust aims to leverage the UK's growing elderly care market and plans to expand through existing operator relationships and new investments.
CareTrust REIT (NYSE: CTRE) ha annunciato un accordo per acquisire Care REIT plc (LON: CRT) in un'operazione in contante valutata a 817 milioni di dollari, comprendente 577 milioni di dollari in capitalizzazione di mercato e 240 milioni di dollari in debito netto assunto.
L'acquisizione offre un premio del 32,8% rispetto al prezzo di chiusura del 10 marzo 2025 di Care REIT. Il portafoglio di Care REIT include 137 case di cura con circa 7.500 letti operativi nel Regno Unito, affittati a 15 operatori con una durata media ponderata residua del contratto di 20 anni. Le proprietà generano un affitto contrattuale annuale di 66 milioni di dollari, rappresentando un rendimento iniziale dell'8,1%, con una copertura dell'affitto EBITDARM del portafoglio di 2,2x.
La transazione, prevista per chiudere nel secondo trimestre del 2025, sarà eseguita tramite uno schema di accordo ed ha ricevuto l'approvazione unanime dai consigli di amministrazione di entrambe le aziende. CareTrust mira a sfruttare il crescente mercato della cura degli anziani nel Regno Unito e prevede di espandersi attraverso le relazioni con gli operatori esistenti e nuovi investimenti.
CareTrust REIT (NYSE: CTRE) ha anunciado un acuerdo para adquirir Care REIT plc (LON: CRT) en un acuerdo en efectivo valorado en 817 millones de dólares, que incluye 577 millones de dólares en capitalización de mercado y 240 millones de dólares en deuda neta asumida.
La adquisición ofrece una prima del 32.8% sobre el precio de cierre de Care REIT del 10 de marzo de 2025. El portafolio de Care REIT incluye 137 hogares de cuidado con aproximadamente 7,500 camas operativas en el Reino Unido, arrendados a 15 operadores con un plazo de arrendamiento promedio ponderado restante de 20 años. Las propiedades generan un alquiler contractual anual de 66 millones de dólares, representando un rendimiento inicial del 8.1%, con una cobertura de alquiler EBITDARM del portafolio de 2.2x.
La transacción, que se espera cerrar en el segundo trimestre de 2025, se llevará a cabo a través de un esquema de acuerdo y ha recibido la aprobación unánime de las juntas de ambas compañías. CareTrust busca aprovechar el creciente mercado de cuidado de ancianos en el Reino Unido y planea expandirse a través de relaciones con operadores existentes y nuevas inversiones.
CareTrust REIT (NYSE: CTRE)는 Care REIT plc (LON: CRT)를 8억 1,700만 달러에 현금 거래로 인수하기 위한 계약을 발표했습니다. 이 금액은 5억 7,700만 달러의 시장 자본화와 2억 4,000만 달러의 인수된 순부채를 포함합니다.
이번 인수는 Care REIT의 2025년 3월 10일 종가에 대해 32.8%의 프리미엄을 제공합니다. Care REIT의 포트폴리오에는 약 7,500개의 운영 침대를 가진 137개의 요양원이 포함되어 있으며, 이는 20년의 가중 평균 잔여 임대 기간을 가진 15명의 운영자에게 임대되고 있습니다. 이 자산들은 연간 6,600만 달러의 계약 임대료를 생성하며, 이는 초기 수익률 8.1%를 나타내고, 포트폴리오 EBITDARM 임대료 커버리지 비율은 2.2배입니다.
이번 거래는 2025년 2분기에 마감될 예정이며, 협약의 형태로 진행되며 두 회사의 이사회에서 만장일치로 승인되었습니다. CareTrust는 영국의 노인 돌봄 시장의 성장 잠재력을 활용하고 기존 운영자와의 관계 및 새로운 투자를 통해 확장할 계획입니다.
CareTrust REIT (NYSE: CTRE) a annoncé un accord pour acquérir Care REIT plc (LON: CRT) dans le cadre d'une opération en espèces d'une valeur de 817 millions de dollars, comprenant 577 millions de dollars de capitalisation boursière et 240 millions de dollars de dette nette assumée.
L'acquisition offre une prime de 32,8% par rapport au prix de clôture de Care REIT du 10 mars 2025. Le portefeuille de Care REIT comprend 137 maisons de soins avec environ 7 500 lits opérationnels au Royaume-Uni, loués à 15 opérateurs avec une durée moyenne pondérée restante de bail de 20 ans. Les propriétés génèrent un loyer contractuel annuel de 66 millions de dollars, représentant un rendement initial de 8,1 %, avec un ratio de couverture de loyer EBITDARM du portefeuille de 2,2x.
La transaction, qui devrait être finalisée au deuxième trimestre 2025, sera réalisée par le biais d'un schéma d'arrangement et a reçu l'approbation unanime des conseils d'administration des deux entreprises. CareTrust vise à tirer parti du marché croissant des soins aux personnes âgées au Royaume-Uni et prévoit de s'étendre par le biais de relations avec des opérateurs existants et de nouveaux investissements.
CareTrust REIT (NYSE: CTRE) hat eine Vereinbarung zur Übernahme von Care REIT plc (LON: CRT) in einem Barangebot im Wert von 817 Millionen US-Dollar bekannt gegeben, einschließlich 577 Millionen US-Dollar Marktkapitalisierung und 240 Millionen US-Dollar übernommenen Nettoschulden.
Die Übernahme bietet eine Prämie von 32,8% auf den Schlusskurs von Care REIT am 10. März 2025. Das Portfolio von Care REIT umfasst 137 Pflegeeinrichtungen mit etwa 7.500 betrieblichen Betten im Vereinigten Königreich, die an 15 Betreiber mit einer gewichteten durchschnittlichen verbleibenden Mietdauer von 20 Jahren vermietet sind. Die Immobilien generieren eine jährliche vertragliche Miete von 66 Millionen US-Dollar, was einer anfänglichen Rendite von 8,1% entspricht, mit einer EBITDARM-Mietdeckung des Portfolios von 2,2x.
Die Transaktion, die im 2. Quartal 2025 abgeschlossen werden soll, wird durch einen Plan zur Regelung durchgeführt und hat die einstimmige Genehmigung der Vorstände beider Unternehmen erhalten. CareTrust beabsichtigt, den wachsenden Markt für Altenpflege im Vereinigten Königreich zu nutzen und plant, durch bestehende Betreiberbeziehungen und neue Investitionen zu expandieren.
- Significant portfolio expansion with 137 care homes and 7,500 beds
- Strong initial yield of 8.1% on investment
- Healthy EBITDARM rent coverage of 2.2x
- Long-term leases with 20-year weighted average remaining term
- Built-in inflation protection with 2-4% annual rent escalators
- Substantial debt assumption of US$240 million
- Execution risk in entering new UK market
- Integration challenges with international operations
- Regulatory approval requirements could delay closing
Insights
CareTrust REIT's $817 million acquisition of UK-based Care REIT represents a significant strategic expansion that introduces international diversification to their portfolio. The deal brings 137 care homes with approximately 7,500 beds across the UK under CareTrust's umbrella, all secured with triple-net leases featuring a substantial 20-year weighted average lease term.
The financial metrics of this acquisition appear compelling. CareTrust is achieving an initial yield of 8.1% based on Care REIT's reported annual contractual rent of $66 million. This yield compares favorably to typical US healthcare REIT acquisitions in the current market. The strong EBITDARM rent coverage of 2.2x indicates the underlying operations generate sufficient cash flow to comfortably cover lease obligations, providing important downside protection.
While CareTrust is paying a 32.8% premium to Care REIT's closing share price, this premium appears justified by the long-term lease structures with inflation-based escalators (floor of 2%, cap of 4%) and the opportunity to enter a new market with favorable demographics. The UK's aging population and new construction create a supply-demand imbalance that should support strong occupancy levels.
The transaction's $577 million equity component plus assumption of $240 million in net debt represents a meaningful transaction for CareTrust, equating to roughly 22% of its market capitalization. While this introduces some execution risk related to international operations, the strong existing operator relationships (15 operators) provide a foundation for continued growth in the UK market.
This transaction marks CareTrust's strategic entry into the UK healthcare real estate market, capitalizing on demographic and supply-demand dynamics that mirror many of the opportunities seen in the US senior housing sector, but at an earlier stage in the cycle. The UK care home market faces a growing demand-supply imbalance driven by an aging population with increasing care needs, new development, and restricted capital availability.
The Care REIT portfolio provides immediate scale with 7,500 operating beds across a diverse geographic footprint in England, Scotland, and Northern Ireland. This diversification reduces regional regulatory and reimbursement risk, a critical factor in healthcare real estate. The 15-operator tenant base further diversifies operational risk compared to more concentrated operator relationships.
The lease structures are particularly attractive with triple-net terms that transfer operational expenses to tenants while providing CareTrust with inflation-protected income streams through escalators that have 2% floors and 4% caps. In the current inflationary environment, these protections provide significant value. The 20-year weighted average lease term significantly exceeds typical US healthcare lease durations.
From a market positioning perspective, CareTrust appears to be entering the UK at an opportune time. The fragmented nature of UK care home ownership creates consolidation opportunities, while high construction and borrowing costs limit new competitive supply. Care REIT's established operator relationships and development pipeline provide immediate growth vectors beyond the initial portfolio acquisition.
While international expansion introduces execution challenges, the fundamental real estate characteristics of these assets - purpose-built facilities with long-term leases to experienced operators in a demographically favorable market - align well with CareTrust's investment thesis and operational expertise.
Conference Call Scheduled for Tuesday, March 11, 2025 at 8:00 a.m. EDT
Based on the Sterling to Dollar exchange rate on March 10, 2025, the terms of the acquisition represent a Care REIT market capitalization of
Care REIT is a
CareTrust has spent considerable time evaluating its entry into the
Commenting on this transaction, Dave Sedgwick, CareTrust’s President and Chief Executive Officer said: “We have been following the
The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the
Bidco has obtained irrevocable undertakings from Care REIT‘s directors and certain of its other shareholders to vote in favor of the Scheme in respect of, in aggregate, 12,305,991 Care REIT Shares, representing approximately
Piper Sandler Ltd is acting as sole financial advisor and Jones Day is acting as legal advisor to CareTrust.
Conference Call
A conference call will be held on March 11, 2025, at 8:00 a.m. Eastern Daylight Time (5:00 a.m. Pacific Time), during which CareTrust’s management will discuss the transaction and an accompanying presentation. The toll-free dial-in number is 1 (800) 715-9871 or toll dial-in number is 1 (646) 307-1963 and the conference ID number is 1786141. To listen to the call online, or to view the accompanying presentation, please visit the Investors section of the CareTrust website at http://investor.caretrustreit.com. This call will be recorded and will be available for replay via the website for 30 days following the call.
About CareTrust
CareTrust is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust is pursuing both external and organic growth opportunities across
About Care REIT plc
Care REIT plc (formerly Impact Healthcare REIT plc) acquires, renovates, extends and redevelops high quality healthcare real estate assets in the
EBITDARM and EBITDARM Rent Coverage Ratio
This press release contains a reference to Care REIT’s portfolio EBITDARM rent coverage ratio for the twelve month period ended September 30, 2024. Care REIT calculates its portfolio EBITDARM rent coverage ratio based on its tenants’ EBITDARM for a twelve month period divided by total annual rent during such period. EBITDARM refers to earnings before interest, income taxes, depreciation, amortization, rent, and management fees, and is a useful approximation for Care REIT’s tenants’ cash earnings, which they can use to pay their rent to Care REIT. EBITDARM and EBITDARM coverage ratio as prepared by Care REIT include adjustments determined by Care REIT, including to exclude seven turnaround homes and to exclude new homes in build-up. Care REIT’s EBITDARM rent coverage information included herein has been provided by Care REIT, and Care REIT’s methodologies for calculating this measure may not be comparable to those used by other companies, including CareTrust. Additionally, CareTrust expects that most financial statements of Care REIT’s tenants are unaudited, and Care REIT has not independently verified all financial information it received from such tenants. CareTrust has not independently verified this information, but has no reason to believe such information is inaccurate in any material respect. Accordingly, although CareTrust believes that Care REIT’s EBITDARM rent coverage ratio is a useful way to analyze the cash potential of its assets, readers should not place undue reliance on the accuracy of this metric.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains certain statements which are, or may be deemed to be, forward-looking statements (including for the purposes of the US Private Securities Litigation Reform Act of 1995), beliefs or opinions. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "envisage", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. Such forward looking statements include, but are not limited to, statements regarding the following: industry and demographic conditions, the care home investment and financing environment, Care REIT’s future growth prospects, the benefits of the acquisition, and the ability of CareTrust to effectively combine the operations of Care REIT with its own operations. These statements are based on assumptions and assessments made by Care REIT, and/or CareTrust in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this press release could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given by CareTrust that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this Press Release. Neither CareTrust nor Bidco assumes any obligation and CareTrust and Bidco disclaim any intention or obligation, to update or correct the information contained in this press release (whether as a result of new information, future events or otherwise), except as required by applicable law or regulation.
The forward-looking statements have not been reviewed by the auditors of Care REIT, CareTrust or Bidco or their respective financial advisers. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements is the satisfaction of the conditions and the risks discussed in CareTrust's filings with the US Securities and Exchange Commission, which can be accessed at https://www.sec.gov/edgar/browse/?cik=1590717, (including in CareTrust’s Annual Report on Form 10-K for the year ended December 31, 2024, including in the section entitled “Risk Factors” in Item 1A of such reports, as such risk factors may be amended, supplemented or superseded from time to time by other reports CareTrust files with the SEC), as well as additional factors such as (i) changes in global, political, economic, business, competitive, market and regulatory forces, (ii) future currency exchange and interest rates, (iii) the ability of CareTrust to integrate Care REIT’s operations and to achieve the benefits expected to result from the acquisition, (iv) future business combinations or dispositions, (v) the ability and willingness of tenants to meet and/or perform their obligations under leases, including without limitation, their respective obligations to indemnify, defend and hold CareTrust or Care REIT harmless from and against various claims, litigation and liabilities; (vi) the ability of tenants to comply with applicable laws, rules and regulations in the operation of the properties leased to them, (vii) the ability of CareTrust and its affiliates (including, after the acquisition, Care REIT) to generate sufficient cash flows to service outstanding indebtedness, CareTrust's and, after the acquisition, Care REIT's access to debt and equity capital markets, (viii) CareTrust’s ability to retain key management personnel, (ix) the risk that CareTrust may have to incur impairment charges related to its assets held for sale if it is unable to sell such assets at the prices it expects, (x) changes in tax laws and tax rates, (xi) the impact of healthcare reform legislation, and (xii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments. Such forward-looking statements should therefore be construed in the light of such factors. Neither CareTrust nor Bidco, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this press release will actually occur.
1 Approximately 1,200 Care REIT shares (the “Scheme Restricted Shares”), representing about
2 The document to be sent to Care REIT shareholders containing, among other things, the Scheme (the "Scheme Document") is to be published within twenty-eight (28) days of today's announcement.
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CareTrust REIT, Inc.
(949) 542-3130
ir@caretrustreit.com
Source: CareTrust REIT, Inc.
FAQ
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